Acct 202 Mod 6
b. the amount shareholders have invested in exchange for stock
Common Stock plus Additional Paid-in Capital (Contributed Capital) of $1,000,000 represents ______. a. the accumulated profits earned on shareholders' investment b. the amount shareholders have invested in exchange for stock c. accumulated earnings minus accumulated dividends d. donations received from creditors
a. $90,000
Just In Thyme, Inc., has the following year-end shareholders' equity balances: Common Stock of $20,000; Additional Paid-in Capital of $30,000; and Retained Earnings of $50,000. If Just In Thyme repurchases $10,000 of its stock, the total shareholders' equity balance would equal ______. a. $90,000 b. $60,000 c. $110,000 d. $40,000
bal sht: C. Interest Payable inc stmt: A. Interest Expense stmt of cf: B. Interest Paid *order consistent, letters not
Match each line item with the financial statement on which it would most likely appear. bal sht: , inc stmt: , stmt of cf: A. Interest Expense B. Interest Paid C. Interest Payable
b. Income Statement and Balance Sheet *order not consistent
A company's bookkeeper forgot to make the adjusting entry to accrue Interest Expense at the end of September. As a result,there will be an error(s) on September's ________. a. Statement of Cash Flows only b. Income Statement and Balance Sheet c. Income Statement, Balance Sheet, and Statement of Cash Flows d. Income Statement only e. Balance Sheet only
[a] equity [b] debt
A financing activity that involves issuing stock is referred to as [a] financing. A financing activity that involves borrowing from creditors is referred to as [b] financing.
a. shareholders' equity; balance sheet
Additional Paid-in Capital of $1,000,000 is found in the ______ section of the ______. a. shareholders' equity; balance sheet b. operating income; income statement c. retained earnings; balance sheet d. retained earnings; income statement
c. stands for initial public offering d. is when a private company goes public
An IPO ______. (Select all that apply.) a. stands for independent public obligations b. stands for issued private options c. stands for initial public offering d. is when a private company goes public
a. 100,000
AnuU, Inc., sold 100,000 shares of the 1,000,000 shares it is allowed to sell. AnuU repurchased 10,000 of these shares. The number of shares issued equals ______ shares. a. 100,000 b. 1,000,000 c. 10,000 d. 90,000 e. 910,000
b. bond issuer *order not consistent
Callable bonds can be called for early retirement at the choice of the ______. a. bond holder b. bond issuer c. SEC d. stockholder
a. debit
Dilution Solutions, Inc., repurchased 1,000 shares of its $1 par value common stock for $5,000. The journal entry to record this transaction includes a $5,000 ______ to Treasury Stock. a. debit b. credit
e. $10,000 debit to Treasury Stock f. $10,000 credit to Cash
Dilution Solutions, Inc., repurchased 500 shares of its $2 par value common stock for $10,000. The journal entry to record this transaction includes a ______. (Select all that apply.) a. $1,000 debit to Cash b. $1,000 credit to Treasury Stock c. $10,000 credit to Treasury Stock d. $1,000 debit to Treasury Stock e. $10,000 debit to Treasury Stock f. $10,000 credit to Cash
d. liability; credit; declaration
Dividends Payable is a ______ account with a normal ______ balance and is recorded on the ______ date. a. shareholders' equity; credit; record b. shareholders' equity; debit; declaration c. liability; debit; payment d. liability; credit; declaration e. shareholders' equity; credit; declaration
c. the same as *no letter IRQ
On August 1, Year 1, Luna Sea Motel, Inc., issued a 9%, 8-month, $10,000 note and a 9%, 10-month, $10,000 note. The interest payable on the 9%, 8-month note will be _____ the interest on the 10-month note as of December 31. a. greater than b. less than c. the same as
debit: E. Cash $10,000 credit: G. Notes Payable $10,000 *letters not consistent
On August 1, Year 1, Luna Sea Motel, Inc., issued a 9%, 8-month, $10,000 note. Record the August 1, Year 1, journal entry. debit: , credit: A. Cash $10,800 B. Interest Payable $800 C. Notes Expense $10,400 D. Notes Expense $10,000 E. Cash $10,000 F. Notes Payable $10,800 G. Notes Payable $10,000
b. December 1
On December 1, Garden of Eat'n, Inc., declared a $0.25 per share dividend to its common shareholders to be paid to those on record at the close of business December 31. The dividend is to be paid on January 7 of the followingyear. On which date should Dividends Payable be credited? a. December 31 b. December 1 c. January 7 d. None of these dates because Dividends Payable is debited, not credited
as: E. 11,620 Cash liab: C. 11,620 Note Payable SE: B. 0 No Effect
Show the effect of the issuance of the note. as: , liab: , SE: A. (697) Interest Expense B. 0 No Effect C. 11,620 Note Payable D. (11,620) Cash; 11,620 Note Receivable E. 11,620 Cash F. 12,317 Note payable G. (11,620) Notes Expense H. 12,317 Cash I. 11,620 Notes Payable; 697 Interest Payable
d. finalizes its list of shareholders who will receive dividends
The date of record is the date on which the corporation ______. a. records a credit to Cash records its obligation to pay a dividend b. records a credit to Dividends Payable c. makes a payment to the shareholders of record d. finalizes its list of shareholders who will receive dividends
as: G. (6,000) Cash liab: A. 0 No Effect SE: C. (6,000) Treasury Stock *letters are consistent
There were 10,000 shares issued and outstanding before T-ball, Inc., decided to buy back some of its own stock to have on hand for end-of-year bonuses. It buys 200 shares at $30 per share. Show the effect of the purchase of treasury stock on the accounting equation: as: , liab: , SE: A. 0 No Effect B. (10,000) Treasury Stock C. (6,000) Treasury Stock D. 10,000 Common Stock; (10,000) Treasury Stock E. 6,000 Common Stock; (6,000) Treasury Stock F. (10,000) Cash G. (6,000) Cash H. 6,000 Cash
c. debit Treasury Stock $10,000 e. credit Cash $10,000
There were 10,000 shares issued and outstanding before T-ball, Inc., decided to buy back some of its own stock to have on hand for end-of-year bonuses. It buys 200 shares at $50 per share. The entry to record the purchase of these 200 shares includes a ______. (Select all that apply.) a. debit Common Stock $10,000 b. debit Cash $10,000 c. debit Treasury Stock $10,000 d. debit Additional Paid-in Capital $10,000 e. credit Cash $10,000 f. credit Common Stock $50,000
c. used to calculate interest payments e. always expressed as an annual interest rate
A bond's stated interest rate is ______. (Select all that apply.) a. affected by the price investors pay for the bond b. increased when the market price of the bond falls c. used to calculate interest payments d. used to determine Interest Expense e. always expressed as an annual interest rate
b. dividend
A company's distribution of its acccumulated earnings is a(n) ______. a. asset b. dividend c. retained earnings d. expense
As: H. (14,238) Cash Liab: E. (7,745) Notes Payable SE: B. (6,493) Interest Expense *letters not consistent
Reid & Wright Learning Center needed some long-term financing and arranged for a 10-year, $100,000, 7% mortgage loan on January 1, Year 1. Annual payments of $14,238 will be made on December 31 each year. Show the effect on the accounting equation of the second annual payment. Round to the nearest dollar. As: , Liab: , SE: A. (7,745) Cash B. (6,493) Interest Expense C. (7,000) Interest Expense D. (7,238) Notes Payable E. (7,745) Notes Payable F. 0 No Effect G. (6,493) Cash H. (14,238) Cash I. (14,238) Notes Payable J. (10,000) Interest Expense K. (6,493) Notes Payable
as: C. (14,238) Cash liab: F. (7,238) Notes Payable SE: A. (7,000) Interest Expense *letters not consistent
Drain Surgeons, Inc., needed some long-term financing and arranged for a 10-year, $100,000, 7% mortgage loan on January 1, Year 1. Annual payments of $14,238 will be made on December 31 each year. Show the effect on the accounting equation of the first annual payment. Round to the nearest dollar. as: , liab: , SE: A. (7,000) Interest Expense B. (7,000) Cash C. (14,238) Cash D. (14,238) Notes Payable E. (7,000) Notes Payable F. (7,238) Notes Payable G. (14,238) Interest Expense H. (7,238) Cash I. (238) Notes Payable J. 0 No Effect
10-Year Bonds Payable: B. Long-term Liability Common Stock: C. Neither 3-Month Notes Payable: A. Current Liability Accounts Payable: A. Current Liability Accounts Receivable: C. Neither *letters consistent
Identify each as a Current Liability, Long-term Liability or Neither. 10-Year Bonds Payable: Common Stock: 3-Month Notes Payable: Accounts Payable: Accounts Receivable: A. Current Liability B. Long-term Liability C. Neither
c. receiving dividends d. selling the stock for more than its cost *order not consistent
Investors earn a return on stock investments by ______. (Select all that apply.) a. receiving a principal amount that is greater than cost b. receiving interest c. receiving dividends d. selling the stock for more than its cost e. buying the stock at the lower of cost or market
Int exp: F. (8,000); Income Statement int paid: D. 0; Statement of Cash Flows bonds pay: H. 200,000; Balance Sheet int pay: C. 8,000; Balance Sheet
On June 30, Year 1, Cashews, Inc., issued $200,000 worth of 8% bonds at par value. Interest will be paid annually on June 30. For each item listed below, select the correct dollar amount and December 31 Year 1 financial statement for each line item: Int exp: , int paid: , bonds pay: , int pay: A. (16,000); Income Statement B. (8,000); Balance Sheet C. 8,000; Balance Sheet D. 0; Statement of Cash Flows E. 16,000; Balance Sheet F. (8,000); Income Statement G. (16,000); Statement of Cash Flows H. 200,000; Balance Sheet
d. the same as
On October 1, Lawn & Order, Inc., borrowed $20,000 by issuing an 8-month, 6% note and $20,000 by issuing a 4-month, 6% note. Interest Expense for the month ended October 31 on the 8-month note is _______ the 4-month note. a. lower than b. higher than c. $0 because the interest will be paid later d. the same as
a. maturity date b. interest payment dates c. principal d. stated rate
Which of the following information is found on a bond? (Select all that apply.) a. maturity date b. interest payment dates c. principal d. stated rate e. sales price f. market rate g. dividend rate
a. Additional Paid-in-Capital found on the Statement of Cash Flows
Which of the following statements is FALSE? a. Additional Paid-in-Capital found on the Statement of Cash Flows b. Inventory is found on the Balance Sheet c. Notes Payable is found on the Balance Sheet d. Sales is found on the Income Statement
d. Convertible
______ bonds are retired when the bondholder exchanges them for the issuing company's stock. a. Serial b. Callable c. Treasury d. Convertible
d. market interest rates decreased
A common reason for calling in a callable bond before its maturity date is that _____. a. market interest rates increased b. the stated interest rate on the bond decreased c. the stated interest rate on the bond increased d. market interest rates decreased
c. dividend
A company's distribution of its acccumulated earnings is a(n) ______. a. asset b. expense c. dividend d. retained earnings
a. There are 10,000 shares of treasury stock.
A corporation has 200,000 shares of stock authorized, 80,000 shares issued and 70,000 shares outstanding. Which of the following statements is TRUE? a. There are 10,000 shares of treasury stock. b. There are 80,000 shares of treasury stock. c. 200,000 shares have been sold. d. There are 70,000 shares of treasury stock.
c. decrease in assets d. decrease in shareholders' equity
A corporation repurchased 1,000 shares of its $1 par value common stock for $8,000. The effect of this transaction on the accounting equation includes a(n) ______. (Select all that apply.) a. increase in liabilities b. increase in shareholders' equity c. decrease in assets d. decrease in shareholders' equity e. increase in assets f. decrease in liabilities
c. Additional Paid-in Capital will be understated e. Common Stock will be overstated
Canton, Inc. issued 10,000 shares of $1 par value common stock at $10 per share. Mr. Smart, the bookkeeper, recorded this transaction with a $100,000 debit to Cash and a $100,000 credit to Common stock. As a result of this entry ______. (Select all that apply.) a. debit Common Stock $22,000,000 b. total stockholders' equity will be understated c. Additional Paid-in Capital will be understated d. total stockholders' equity will be overstated e. Common Stock will be overstated f. total assets will be overstated
b. affects how common stock is recorded c. is the amount Common Stock is credited when stock is issued d. is the minimum legal capital required to be maintained by the company
Common stock's par value ______. (Select all that apply.) a. equals the amount of cash contributed by shareholders b. affects how common stock is recorded c. is the amount Common Stock is credited when stock is issued d. is the minimum legal capital required to be maintained by the company
c. the amount shareholders have invested in exchange for stock
Contributed Capital represents ______. a. par value minus additional paid-in capital b. donations received from shareholders c. the amount shareholders have invested in exchange for stock d. the accumulated profits retained by the company e. the earnings kept by the company
Int exp: C. (7,000); Income Statement Not pay: J. 92,762; Balance Sheet Cash paid for int: E. (7,000); Statement of Cash Flows - Operating Activities Payment of not pay principal: G. (7,238); Statement of Cash Flows - Financing Activities *letters consistent
Cracked Egg Diner needed some long-term financing and arranged for a 10-year, $100,000, 7% mortgage loan on January 1, Year 1. Annual payments of $14,238 will be made on December 31 each year. For each item, select the amount as of or for the Year Ended December 31, Year 1, in the column of the one financial statement where the amount is found. Int exp: , Not pay: , Cash paid for int: , Payment of not pay principal: A. (14,238); Income Statement B. (7,238); Income Statement C. (7,000); Income Statement D. 100,000; Income Statement E. (7,000); Statement of Cash Flows - Operating Activities F. 14,238; Statement of Cash Flows - Operating Activities G. (7,238); Statement of Cash Flows - Financing Activities H. (14,238); Statement of Cash Flows - Financing Activities I. 7,238; Balance Sheet J. 92,762; Balance Sheet K. 100,000; Balance Sheet
As: H. 500,000 Cash liab: A. 0 No Effect SE: K. 100,000 Common Stock; 400,000 Additional Paid-in Capital *letters consistent
Daffy Duct, Inc., began operations in January by issuing 100,000 shares of $1 par value common stock for $5 per share. Net income for the year was $500,000 and dividends were $44,000. Using the information above, show the effect of the issuance of the common stock on the accounting equation: As: , liab: , SE: A. 0 No Effect B. 100,000 Cash C. (100,000) Cash D. 500,000 Common Stock E. 100,000 Common Stock F. (100,000) Common Stock G. (500,000) Common Stock H. 500,000 Cash I. (500,000) Cash J. 400,000 Common Stock; 100,000 Additional Paid-in Capital K. 100,000 Common Stock; 400,000 Additional Paid-in Capital L. (400,000) Common Stock; (100,000) Additional Paid-in Capital M. (100,000) Common Stock; (400,000) Additional Paid-in Capital
c. Common Stock will be overstated.
Daffy Duct, Inc., issued 100,000 shares of $1 par value common stock at $5 per share. Miss Steak, the bookkeeper, recorded the transaction with a $500,000 debit to Cash and $500,000 credit to Common Stock. Which of the following is true? a. This entry is correct. b. Total shareholders' equity is overstated. c. Common Stock will be overstated. d. Total assets are understated.
a. This entry is correct.
Daffy Duct, Inc., issued 100,000 shares of no-par common stock at $5 per share. The bookkeeper, recorded the transaction with a $500,000 debit to Cash and credit to Common Stock. Which of the following is true? a. This entry is correct. b. Total shareholders' equity is overstated. c. Common Stock will be overstated. d. Total assets are understated.
as: I. 6,000 Cash liab: A. 0 No Effect SE: E. 250 Common Stock; 5,750 Additional Paid-in Capital *letters consistent
Dewey, Cheatem & Howe, Inc., received cash from selling 500 shares of its $0.50 par value common stock at $12 per share. Show the effect of issuing stock on the accounting equation: as: , liab: , SE: A. 0 No Effect B. (6,000) Common Stcok C. 250 Common Stock D. 6,000 Common Stock E. 250 Common Stock; 5,750 Additional Paid-in Capital F. 5,750 Common Stock; 250 Additional Paid-in Capital G. (250) Common Stock; (5,750) Additional Paid-in Capital H. 6,000 Sales Revenue I. 6,000 Cash J. 250 Cash K. (6,000) Cash
b. Abner Crummie, Inc., will not be directly affected by this transaction.
In an IPO on May 1, Year 1, Timmy Hilfigure purchased 1,000 shares of Abner Crummie, Inc. for $5,000. On April 30, Year 6, Timmy Hilfigure sold the 1,000 shares for $8,000 to Ralph Loring. What is the effect of the sale on April 30, Year 6? a. Abner Crummie, Inc., will record a decrease in Cash of $8,000. b. Abner Crummie, Inc., will not be directly affected by this transaction. c. Abner Crummie, Inc., will record a $3,000 gain. d. Abner Crummie, Inc., will record a $3,000 loss.
debentures: C. Unsecured Bonds callable bands: A. The bond issuer can pay off the bonds at any time secured bonds: B. Gives the bondholder a claim to a specific asset if the issuer defaults on the loan convertible bonds: D. Allows the bondholder to exchange the bond for stock
Match each type of bond with its description. Use each description only once. debentures: , callable bands: , secured bonds: , convertible bonds: A. The bond issuer can pay off the bonds at any time B. Gives the bondholder a claim to a specific asset if the issuer defaults on the loan C. Unsecured Bonds D. Allows the bondholder to exchange the bond for stock
dividends: C. $(600,000); Statement of Shareholders' Equity dividends payable: H. $600,000; Balance Sheet
On December 1, Year 1, the board of directors of Buy & Large, Inc., declared a cash dividend of $2 per share on the 300,000 common shares outstanding on record at December 31, Year 1, payable January 10, Year 2, the following year. No other dividends were declared in either year. What is the amount and on which Year 1 financial statement does Dividends and Dividends Payable appear? dividends: , dividends payable: A. $(600,000); Income Statement B. $600,000; Income Statement C. $(600,000); Statement of Shareholders' Equity D. $600,000; Statement of Shareholders' Equity E. $(600,000); Statement of Cash Flows F. $600,000; Statement of Cash Flows G. $(600,000); Balance Sheet H. $600,000; Balance Sheet
as: H. 0 No Effect liab: H. 0 No Effect SE: H. 0 No Effect
On December 1, the board of directors of Buy & Large, Inc., declared a cash dividend of $2 per share on the 300,000 common shares outstanding on record at December 31, payable January 10 of the following year. No other dividends were declared in either year. Show the effect on the accounting equation of the entry to be recorded on December 31: as: , liab: , SE: A. (600,000) Dividends Payable B. (600,000) Additional Paid-in Capital C. 600,000 Common Stock D. 600,000 Cash E. (600,000) Treasury Stock F. (600,000) Cash G. 600,000 Dividends Payable H. 0 No Effect I. (600,000) Dividends J. (600,000) Common Stock
as: J. (600,000) Cash liab: I. (600,000) Dividends Payable SE: H. 0 No Effect
On December 1, the board of directors of Buy & Large, Inc., declared a cash dividend of $2 per share on the 300,000 common shares outstanding on record at December 31, payable January 10 of the following year. No other dividends were declared in either year. Show the effect on the accounting equation of the entry to be recorded on January 10: as: , liab: , SE: A. (600,000) Common Stock B. 600,000 Dividends Payable C. (600,000) Dividends D. (600,000) Additional Paid-in Capital E. 600,000 Common Stock F. 600,000 Cash G.(600,000) Treasury Stock H. 0 No Effect I. (600,000) Dividends Payable J. (600,000) Cash
as: B. (16,000) Cash liab: C. 0 No Effect SE: G. (16,000) Interest Expense
On January 1, Year 1, Big Seats Furniture, Inc., issued $200,000 worth of 8% bonds at $200,000. Interest will be paid annually on December 31. Show the effect of the first interest payment on the accounting equation. as: , liab: , SE: A. 200,000 Bonds Income B. (16,000) Cash C. 0 No Effect D. 16,000 Interest Income E. (8,000) Interest Payable F. 16,000 Cash G. (16,000) Interest Expense H. 216,000 Bonds Payable
b. decrease *order not consistent
On January 1, Year 1, Clean Dirt, Inc., signed a $10,000,000, 6%, 10-year mortgage note to finance the purchase of an excavator. The note will be repaid in 10 equal annual installments of $1,358,679. Over the 10-year period, as each installment payment is made, the amount that Clean Dirt will show on its balance sheet for Notes Payable will ________. a.increase b. decrease c. remain the same
c. decreases *order not consistent
On January 1, Year 1, Clean Dirt, Inc., signed a $10,000,000, 6%, 10-year mortgage note to finance the purchase of an excavator. The note will be repaid in 10 equal annual installments of $1,358,679. Over the 10-year period, as each installment payment is made, the portion of the payment that is Interest Expense ________. a. increases b. remains the same c. decreases d. The answer cannot be determined from the information given.
Debit: A. Cash $10,000 Credit: E. Notes Payable $10,000 *letters not consistent
On January 1, Year 1, Eatie Gourmet, Inc., borrowed $10,000 at 6% due in four years. Record the January 1, Year 1, journal entry. Debit: , Credit: A. Cash $10,000 B. Notes Expense $10,000 C. Notes Expense $12,400 D. Interest Payable $2,400 E. Notes Payable $10,000 F. Cash $12,400 G. Notes Payable $12,400
a. lower than
On January 1, Year 1, Faux Sure, Inc., borrowed $40,000 on a five-year, 7% note. The loan will be repaid in 5 equal installments of $9,756 each year, beginning on December 31, Year 1. Notes Payable at December 31, Year 2, will be _____ Notes Payable at December 31, Year 1. a. lower than b. the same as c. higher than
as: H. (2,886) Cash liab: A. (2,286) Notes Payable SE: C. (600) Interest Expense *letter not consistent
On January 1, Year 1, Needham, Inc., borrowed $10,000 at 6% for four years. On December 31, Year 1, Needham made its first installment payment of $2,886. Show the effect of the first installment payment on the accounting equation. Round the amounts to the nearest dollar. as: , liab: , SE: A. (2,286) Notes Payable B. 0 No Effect C. (600) Interest Expense D. (600) Notes Payable E. (600) Cash F. (2,886) Notes Payable G. (2,286) Cash H. (2,886) Cash I. (2,886) Interest Expense
[a] 0 [b] 20000 (same as signed/issued) [c] 1117 (install pymt - b*rt) [d] 0 [e] 0 [f] 18883 (b-c)
On January 1, Year 1, Novel Tea, Inc., issued a $20,000, 8%, 10-year mortgage note. The note requires annual payments of $2,717 on December 31. Record the amounts in the Notes Payable T-account below for Year 1 given this information: [a] , [b] , [c] , [d] , [e] , [f]
[a] 0 [b] 1000000 (same as signed/issued) [c] 72378 (install pymt - b*rt) [d] 0 [e] 0 [f] 927622 (b-c)
On January 1, Year 1, Sew What, Inc., signed a $1,000,000, 7%, 10-year mortgage note to buy a new warehouse.The note will be repaid in 10 equal annual installments of $142,378 beginning on December 31, Year 1. Record the amounts in the Notes Payable T-account below for the year ended December 31, Year 1, given this information: [a] , [b] , [c] , [d] , [e] , [f]
d. debit to Notes Payable *order not consistent
On January 1, Year 1, Wok of Fame, Inc., borrowed $700,000 at 5%. The loan will be repaid with equal annual installment payments of $50,000 made on the last day of each year, which is the company's yearend. The second installment payment journal entry will include a larger ______ than in the first installment payment journal entry. a. credit to Interest Expense b. debit to Interest Expense c. credit to Notes Payable d. debit to Notes Payable
a. credit Cash $100,000 f. debit Dividends Payable $100,000
On July 1, the board of directors of Dive Inn, Inc., declared a cash dividend of $0.10 per share on its $1 par value, 1,000,000 common shares outstanding. The date of record is the close of business on July 12, payable August 31. The entry to record the payment of dividends on August 31 includes a ______. (Select all that apply.) a. credit Cash $100,000 b. debit Dividends $10,000 c. credit Cash $10,000 d. credit Dividends $100,000 e. debit Dividends $100,000 f. debit Dividends Payable $100,000
Interest Expense: D. (16,000); Income Statement Interest Paid: G. (16,000); Statement of Cash Flows Bonds Payable: H. 200,000; Balance Sheet Interest Payable: A. 8,000; Balance Sheet
On June 30, Year 1, Cashews, Inc., issued $200,000 worth of 8% bonds at par value. Interest will be paid annually on June 30. For each item listed below, select the correct dollar amount and December 31, Year 2 financial statement for each line item: Int Exp: , Int Paid: , Bonds Pay: , Int Pay: A. 8,000; Balance Sheet B. 0; Statement of Cash Flows C. (8,000); Income Statement D. (16,000); Income Statement E. 16,000; Balance Sheet F. (8,000); Balance Sheet G. (16,000); Statement of Cash Flows H. 200,000; Balance Sheet
a. 2-year note: $1,000 x 6% x 2/12 b. 4-month note: $1,000 x 6% x 2/12 d. 6-month note: $1,000 x 6% x 2/12 *order not consistent (anything ending in 2/12)
On November 1, Tresses, Inc. issued 6%, $1,000 notes with different maturities. Select all of the ones that properly calculate the amount of Interest Payable at December 31. a. 2-year note: $1,000 x 6% x 2/12 b. 4-month note: $1,000 x 6% x 2/12 c. 6-month note: $1,000 x 6% x 2/6 d. 6-month note: $1,000 x 6% x 2/12 e. 4-month note: $1,000 x 6% x 2/4
a. debit to Note Payable of $100,000 c. debit to Interest Payable of $1,000 e. debit to Interest Expense of $5,000 g. credit to Cash of $106,000
On November 1, Year 1, Pans on Fire, Inc., borrowed $100,000 cash on an 1-year, 6% note payable that requires Pan's on Fire to pay both principal and interest on October 31, Year 2. The last adjusting journal entry was made on December 31, Year 1, its year end. The entry to record the payment on October 31, Year 2 would include a ______. (Select all that apply.) a. debit to Note Payable of $100,000 b. credit to Note Payable of $106,000 c. debit to Interest Payable of $1,000 d. debit to Interest Expense of $6,000 e. debit to Interest Expense of $5,000 f. credit to Interest Payable of $6,000 g. credit to Cash of $106,000
debit: C. Interest Expense $100 credit: G. Interest Payable $100 *letters inconsistent
On November 1, Year 1, The Yacht Doc, Inc., borrowed $10,000 at 6% due in eight months. Record the adjusting journal entry for the interest incurred for the year ended December 31, Year 1. debit: , credit: A. Cash $150 B. Cash $75 C. Interest Expense $100 D. Interest Payable $75 E. Interest Payable $150 F. Interest Expense $150 G. Interest Payable $100 H. Interest Expense $75
a. $50,000 debit to Notes Payable b. $51,500 credit to Cash d. $1,000 debit to Interest Payable g. $500 debit to Interest Expense
On September 1, Jurasic Pork Company borrowed $50,000 on a 6%, 6-month note payable to XYZ National Bank. Jurasic Pork recorded an adjusting entry at December 31, its year end. On March 1, the due date, Jurasic Pork recorded its payment of the note and interest. This entry includes a ______. (Select all that apply.) a. $50,000 debit to Notes Payable b. $51,500 credit to Cash c. $1,500 debit to Interest Expense d. $1,000 debit to Interest Payable e. $3,000 credit to Interest Expense f. $1,500 credit to Interest Payable g. $500 debit to Interest Expense h. $2,250 debit to Interest Payable
b. $1,000 debit to Interest Expense g. $1,000 credit to Interest Payable *no letters IRQ
On September 1, Jurasic Pork Company borrowed $50,000 on a 6%, 9-month note payable to XYZ National Bank. Given no previous adjusting entries have been recorded, Jurasic Pork's adjusting entry at December 31 would include a ______. (Select all that apply.) a. $2,250 credit to Interest Payable b. $1,000 debit to Interest Expense c. $2,250 debit to Interest Payable d. $2,250 debit to Interest Expense e. $3,000 debit to Interest Expense f. $1,000 credit to Cash g. $1,000 credit to Interest Payable h. $3,000 credit to Interest Expense
e. common stock
Ownership structure can vary from one company to another, but the most basic form of corporation offers ______. a. preferred stock b. net income c. dividends d. retained earnings e. common stock f. treasury stock
a. kept; balance sheet and statement of shareholders' equity *order inconsistent
Retained Earnings of $100,000 represents a corporation's cumulative earnings ______ and is reported on the ______. a. kept; balance sheet and statement of shareholders' equity b. in cash; balance sheet c. contributed; income statement d. declared; statement of shareholders' equity
c. cumulative net income kept
Retained Earnings represents ______ by the corporation. a. cumulative cash earned b. profits declared and distributed c. cumulative net income kept d. cumulative cash distributed e. cumulative cash retained
a. issued minus treasury
Shares outstanding equals shares ____________ shares. a. issued minus treasury b. authorized minus treasury c. issued plus treasury d. authorized minus issued e. in treasury minus issued f. authorized minus issued
a. affect the financing activities section of the statement of cash flows
The issuance of common stock in exchange for cash will ______. a. affect the financing activities section of the statement of cash flows b. none of these is correct c. not affect the statement of cash flows d. affect the investing activities section of the statement of cash flows e. affect the operating activities section of the statement of cash flows
a. stated *order not consistent
The rate used to calculate the amount of interest payments on bonds is called the ______ rate. a. stated b. market c. principal d. par
as: E. 10,000 Cash liab: A. 0 No Effect SE: I. 500 Common Stock; 9,500 Additional Paid-in Capital *letters are consistent
Tissues, Inc., issued 1,000 shares of its $0.50 par value common stock for $10 per share. Show the effect of issuing the common stock on the accounting equation: as: , liab: , SE: A. 0 No Effect B. 10,000 Common Stock C. 500 Common Stock D. (10,000) Common Stock E. 10,000 Cash F. 500 Cash G. (10,000) Cash H. 9,500 Common Stock; 500 Additional Paid-in Capital I. 500 Common Stock; 9,500 Additional Paid-in Capital J. (500) Common Stock; (9,500) Additional Paid-in Capital K. (9,500) Common Stock; (500) Additional Paid-in Capital
Notes Payable: D. $52,606; Balance Sheet Interest Expense: F. $(7,200); Income Statement Payment of Notes Payable: I. $(7,394); Statement of Cash Flows (financing activities section) Payment of Interest: G. $(7,200); Statement of Cash Flows (operating activities section)
Up-a-Creek, Inc., needed some long-term financing and arranged for a 6-year, $60,000, 12% mortgage loan on January 1, Year 1. Annual payments of $14,594 will be made on December 31 each year. For each item, select the amount as of or for the Year Ended December 31, Year 1, in the column of the one financial statement where each amount is found. Notes Pay: , Int Exp: , Paymt of Notes Pay: , Paymt of Int: A. $45,406; Balance Sheet B. $(14,594); Statement of Cash Flows (financing activities section) C. $(7,394); Income Statement D. $52,606; Balance Sheet E. $(14,594); Income Statement F. $(7,200); Income Statement G. $(7,200); Statement of Cash Flows (operating activities section) H. $60,000; Balance Sheet I. $(7,394); Statement of Cash Flows (financing activities section)
a. Revenue accounts b. Dividends d. Expense accounts
Which of the following accounts are closed into Retained Earnings at yearend? (Select all that apply.) a. Revenue accounts b. Dividends c. Dividends Payable d. Expense accounts e. Common Stock f. Additional Paid-in Capital
